e. FRANCO asked DYNAMO what else he could do in the way of intelligence coverage in Yugoslavia. DYNAMO replied that he would, in time, be able to furnish the following:
(1) Flow of arms and ammunition in Yugoslavia
(2) Pinpoint radar sites
(3) Pressure of KHRUSHCHEV on TITO
(4) Dissention [sic]in Yugoslav government
(5) Names and positions held by Yugoslav leaders to include pro- and anti-sentiments of each.
(6) High powered politics in Yugoslavia
(7) Relationship of Yugoslavia with neighbor countries
(8) Order of Battle information
(9) Codes presently in use in Yugoslav Army
DYNAMO also stated that he would be able to expand his coverage and that he was positive FRANCO would be pleased with the results. He stated he did not consider it difficult to obtain information out of Yugoslavia and that he would prove to FRANCO that "TITO was a toothless tiger who no longer frightens people".
f. FRANCO asked DYNAMO if he could establish a good contact in the San Sabba Refugee Camp in Trieste who could debrief newly arrived refugees, persons of interest, and act as a spotter. DYNAMO replied that he already had such an individual and that he would direct this man's efforts to serve this unit. He stated he would arrange the same setup at the Cremona Refugee Camp. FRANCO again reminded DYNAMO that identities were important; however, all dealings with these individuals would be through him. DYNAMO stated this plan was agreeable and that he would furnish identities at a later date when he could confirm what these individuals could do for us.
g. DYNAMO asked FRANCO if he desired him to make a trip to Trieste. FRANCO replied in the affirmative and DYNAMO stated he believed he could perform this trip in 7 or 8 days. He said he will visit FRANCO on his return from Triest [sic]on or about 18 July and that he would turn over several reports to FRANCO at that time. The question of travel and expenses arose at this time. Because of his position as a priest, it was agreed that DYNAMO could travel first class while on trips for this unit and could spend up to 4,000 lire per day for living expenses. He was instructed on the keeping of train stubs and receipts to which he agreed. He was informed that his sub-sources would be paid for information furnished and that he would be held accountable for any money given to pay them. DYNAMO stated that he realized a lot of details had to be ironed out but requested FRANCO to be patient with him as he was sure there would be complete coordination and agreement in time. DYNAMO showed FRANCO a worn pair of shoes he was wearing and asked FRANCO if he could get him a new pair for him. FRANCO told DYNAMO he would have a pair of black shoes for him when he visited Verona. FRANCO also informed DYNAMO that he would get a new outfit if he came through with his promises; however, if he did not, he would be riding second class again. DYNAMO laughed and replied that he was sure he would get the outfit and he would continue to ride first class.
h. During the course of conversation DYNAMO asked FRANCO whether or not he knew DYNAMO was working for another country. FRANCO replied, "Are you?" DYNAMO stated he was not, and asked FRANCO's opinion of him. FRANCO stated he thought DYNAMO was an individual who believed in an idea and was trying to convince himself he was doing the right thing in pursuing this belief. DYNAMO's face colored at this point and he answered that FRANCO was exact in his opinion. FRANCO then asked why he had obtained Austrian citizenship. DYNAMO replied that he could not answer this question clearly but that it had been the only thing to do at the time. He promised to elaborate on this point at a future meeting.
i. DYNAMO signed a statement in his true name whereby he agrees to use the cover name DOTTORE FABIANO for all future financial transactions. DYNAMO also suggested that FRANCO sign all correspondence to him with the common name FRANCO. This was agreed upon. DYNAMO repeated prior to FRANCO's departure that he would mail FRANCO a card from Trieste advising him when DYNAMO would arrive in Verona. FRANCO then departed and returned to the hotel via #56 bus.
5. Leads: None
6. Instructions to Agent: All instructions to DYNAMO have been reflected at some time or other in paragraph 4 of this report.
7. Agent Handler's Comments and Recommendations:
a. Comments:
DYNAMO is a shrewd individual. He is very blunt in his questions but FRANCO noted that he is impressed when he receives blunt answers. He does not like to "beat around the bush" but is emphatic in his expectations as far as treatment expected and financial remuneration. He does not act like a priest when engaged in intelligence conversations but assumes the attitude of a business man who has a product to sell and who is talking to a potential buyer. He is very business like [sic] in his approach and exudes confidence in his capabilities. He devoted little time to his dislike of TITO but seemed anxious to get right down to business and come to an agreement. FRANCO is convinced that DYNAMO is in this business not only for his conviction but also because of the personal comforts an extra income can provide him with. He will do his best to continue this relation and to assure this income. FRANCO will sit down with him at the next meeting and obtain a complete BSD.
b. Recommendations:
That FRANCO be permitted to continue with DYNAMO working toward a controlled operation. This may take a little time but FRANCO is convinced that DYNAMO will come through.
[signed]
FRANCO
8. Operations Comments:
OK. Will coordinate with [censored] as soon as possible and prior to carding. Until we coordinate [censored] don't make any commitments that we can't break away from. Looks promising.